Auditor Report of Graphite India Ltd.

Mar 31, 2017

Report on the Standalone Indian Accounting Standards

(Ind AS) Financial Statements

1. We have audited the accompanying standalone Ind AS financial statements of Graphite India Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs Responsibility for the Standalone Ind AS

Financial Statements

2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorsâ Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made there under including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of

India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Board of Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matter

9. The financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 1, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated May 12, 2016 and May 14, 2015 respectively. The adjustments to those standalone financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

11. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

(g) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2017 on its financial position in its standalone Ind AS financial statements - Refer Note 37 to the standalone Ind AS financial statements.

ii. The Company has long-term contracts as at March 31, 2017 for which there were no material foreseeable losses. The Company did not have derivative contracts as at March 31, 2017.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017.

iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November

8, 2016 to December 30, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management - Refer Note 35 to the standalone Ind AS financial statements.

Referred to in paragraph 10 of the Independent Auditorsâ Report of even date to the members of Graphite India Limited on the standalone Ind AS financial statements as of and for the year ended March 31, 2017

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.

(c) The title deeds of immovable properties, as disclosed in Note 4.1 on Property, Plant and Equipment to the standalone Ind AS financial statements, are held in the name of the Company, except for the following (details of which are set out in Note 4.8 to the standalone Ind AS financial statements):

Particulars

Gross Block

Net Block

(Rs. in Lakhs)

(Rs. in Lakhs)

Certain Freehold

Land at Nashik

and Titilagarh

9

9

Certain Leasehold

Land at Titilagarh

22

15

ii. The physical verification of inventory (excluding stocks with third parties) have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made and guarantees and security provided by it, as applicable.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of service tax, works contract tax and income tax, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, employeesâ state insurance, sales tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise and value added tax as at March 31, 2017 which have not been deposited on account of a dispute, are as follows:

Name of the statute

Nature of dues

Amount (Rs. in Lakhs)

Period to which the amount relates

Forum where the dispute is pending

Central Excise Act, 1944

Excise Duty,

Interest and Penalty

15

1996-97 and 1999-00

Assistant / Deputy Commissioner of Central Excise

17

2010-11 to 2012-13

Commissioner (Appeals)

236

2004-05 to 2005-06, 2007-08 to 2009-10 and 2012-13

Customs, Excise & Service Tax Appellate Tribunal

19

2000-01

High Court

Central Sales Tax Act, 1956

Sales Tax,

Interest and Penalty

0.07

2009-10

Deputy Commissioner of Sales Tax

0.25

2005-06

Additional Commissioner of Commercial Taxes

1

2011-12

Additional Commissioner, Commercial Division (Appeal)

23

2006-07 and 2007-08

Commissioner (Appeals)

187

2002-03, 2003-04, 2005-06 to 2008-09

Sales Tax Tribunal

43

2003-04

High Court

West Bengal Value Added Tax Act, 2003

Value Added Tax

18

2011-12

West Bengal Taxation Tribunal

Karnataka Value Added Tax Act, 2003

Value Added Tax, Interest and Penalty

85

2010-11

Commercial Tax Officer

8

2008-09

Assistant Commissioner of Commercial Taxes

7

2006-07

High Court

Andhra Pradesh Value Added Tax Act, 2005

Value Added Tax, Interest and Penalty

1

2008-09

Commercial Tax Officer

Customs Act, 1962

Customs Duty, Interest and Penalty

4

1988-89

Chief Metropolitan Magistrate

856

2005-06 to 2007-08

Commissioner of Customs

7

2012-13 and 2013-14

Commissioner (Appeals)

280

1991-92, 1996 to 2000, 2007-08 and 2008-09

Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994

Service Tax, Interest and Penalty

7

2006-07 to 2011-12

Assistant / Deputy Commissioner, Central Excise

16

2007-08

Additional Commissioner

120

2006-07 to 2015-16

Appeal to be filed with Commissioner (Appeals)

400

2006-07 to 2015-16

Commissioner (Appeals)

581

2004-05 to 2011-12

Customs, Excise & Service Tax Appellate Tribunal

105

2005-06 to 2007-08

High Court

Income-tax Act, 1961

Income Tax and Interest

607

2009-10 and 2013-14

Commissioner of Income Tax (Appeals)

viii According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders, as applicable as at the balance sheet date.

ix. In our opinion, and according to the information and explanations given to us, the moneys raised by way of term loans have been applied, on an overall basis, for the purposes for which they were obtained. The Company has not raised any moneys by way of initial public offer and further public offer (including debt instruments).

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of related party transactions have been disclosed in the standalone Ind AS financial statements as required under Indian Accounting Standard 24, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For Price Waterhouse

Firm Registration Number:

301112E

Chartered Accountants

Pinaki Chowdhury

Kolkata Partner

May 18, 2017 Membership Number 57572

Mar 31, 2016

TO THE MEMBERS OF GRAPHITE INDIA LIMITED

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Graphite India Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs Responsibility for the Standalone Financial

Statements

2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorsâ Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made there under including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by âthe Companies (Auditorâs Report) Order, 2016â, issued by the Central Government of India in terms of sub - section (11) of section 143 of the Act (hereinafter referred to as the âOrderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule

7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

(g) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2016 on its financial position in its standalone financial statements - Refer Note 36 to the standalone financial statements;

ii. The Company has long - term contracts and derivative contracts as at March 31, 2016 for which there were no material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2016.

Referred to in paragraph 10(f) of the Independent Auditorsâ Report of even date to the members of Graphite India Limited on the standalone financial statements for the year ended March 31, 2016

Report on the Internal Financial Controls under Clause (i)of Sub - section 3 of Section 143 of the Act

1. We have audited the internal financial controls over financial reporting of Graphite India Limited (âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

2. The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditorsâ Responsibility

3. Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls

A A and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial

Reporting

6. A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the

transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over

Financial Reporting

7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.

(c) The title deeds of immovable properties, as disclosed in Note 11.1 on fixed assets to the standalone financial statements, are held in the name of the Company, except for the following (details of which are set out in Note 11.5 to the standalone financial statements):

Particulars

Gross Block

Net Block

(Rs. in Lakhs)

(Rs. in Lakhs)

Certain Freehold

8.89

8.89

Land at Nashik

and Titlagarh

Certain Leasehold

22.08

15.71

Land at Titlagarh

ii. The physical verification of inventory (excluding stocks with third parties) have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

physical verification of inventory as compared to book records were not material.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act in respect of the loans and investments made, and guarantees and security provided by it, as applicable.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products.

We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, income tax, service tax, works contract tax and labour welfare fund though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including employeesâ state insurance, sales tax, duty

of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise and value added tax as at March 31, 2016 which have not been deposited on account of a dispute, are as follows:

Name of the statute

Nature of dues

Amount (Rs. in Lakhs)

Period to which the amount relates

Forum where the dispute is pending

Central Excise Act, 1944

Excise Duty,

Interest and Penalty

16.00

1996-97, 1999-00, 2010-11 to 2012-13

Assistant / Deputy Commissioner of Central Excise

16.04

2008-09, 2010-11 and 2011-12

Additional Commissioner of Central Excise

266.53

2010-11 to 2012-13

Commissioner, Central Excise

733.99

1999-2000 to 2012-13

Customs, Excise & Service Tax Appellate Tribunal

19.28

2000-01

High Court

Central Sales Tax Act, 1956

Sales Tax,

Interest and Penalty

0.07

2009-10

Deputy Commissioner of Sales Tax

25.13

2005-06 to 2007-08

Additional Commissioner of Commercial Taxes

0.90

2011-12

Additional Commissioner, Commercial Division (Appeal)

229.99

2002-03, 2003-04, 2005-06 to 2008-09

Sales Tax Tribunal

West Bengal Value Added Tax Act, 2003

Value Added Tax

18.17

2011-12

West Bengal Taxation Tribunal

Karnataka Value Added Tax Act, 2003

Value Added Tax and Interest

7.87

2008-09

Assistant Commissioner of Commercial Taxes

Andhra Pradesh Value Added Tax Act, 2005

Value Added Tax, Interest and Penalty

0.77

2008-09

Commercial Tax Officer

Customs Act, 1962

Customs Duty, Interest and Penalty

3.77

1988-89

Chief Metropolitan Magistrate

855.99

2005-06 to 2007-08

Commissioner of Customs

279.74

1991-92, 1996 to 2000, 2007-08 and 2008-09

Customs, Excise & Service Tax Appellate Tribunal

Finance Act, 1994

Service Tax, Interest and Penalty

62.81

2006-07 to 2014-15

Assistant / Deputy Commissioner, Central Excise

84.77

2007-08 to 201112, 2013-14 and 2014-15

Additional Commissioner

122.27

2006-07 to 2015-16

Commissioner (Appeals)

26.41

2004-05 to 2008-09

Joint Commissioner

103.35

2004-05 to 2011-12

Customs, Excise & Service Tax Appellate Tribunal

491.32

2007-08 to 2011-12

Appeal to be filed with Customs, Excise & Service Tax Appellate Tribunal

104.77

2005-06 to 2007-08

High Court

Income-tax Act, 1961

Income Tax and Interest

3,618.15

2009-10 to 2011-12

Commissioner of Income Tax (Appeals)

viii According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders, as applicable, as at the balance sheet date.

ix. In our opinion, and according to the information and explanations given to us, the moneys raised by way of term loans and commercial papers have been applied, on an overall basis, for the purposes for which they were obtained. The Company has not raised any moneys by way of initial public offer or any other further public offer (including debt instruments).

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For Price Waterhouse

Firm Registration Number: 301112E

Chartered Accountants

Pinaki Chowdhury

Kolkata Partner

May 12, 2016 Membership Number 57572

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of
Graphite India Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2015, the Profit and Loss Statement, the Cash
Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone

Financial Statements

2. The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act")
with respect to the preparation of these standalone financial
statements to give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgements and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules
made thereunder including the accounting standards and matters which
are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered

Accountants of India. Those Standards and pronouncements require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditors' judgement, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view, in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2015, and its profit and its
cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by 'the Companies (Auditor's Report) Order, 2015',
issued by the Central Government of India in terms of sub-section (11)
of Section 143 of the Act (hereinafter referred to as the "Order"),
and on the basis of such checks of the books and records of the Company
as we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order.

10.As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.

(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books.

(c) The Balance Sheet, the Profit and Loss Statement, and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.

(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the
directors as on March 31, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.

(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our knowledge and belief
and according to the information and explanations given to us:

i. The Company has disclosed the impact, if any, of pending litigations
as at March 31, 2015 on its financial position in its standalone
financial statements - Refer Note 36 to the financial statements;

ii. The Company did not have any material foreseeable losses on
long-term contracts as at March 31, 2015. The Company did not have any
derivative contracts as at March 31, 2015;

iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year ended March 31, 2015.

Annexure to Independent Auditors' Report Referred to in paragraph 9
of the Independent Auditors' Report of even date to the Members of
Graphite India Limited on the Standalone Financial Statements for the
year ended March 31,2015.

i. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.

(b) The fixed assets of the Company have been physically verified by
the Management during the year and no material discrepancies have been
noticed on such verification. In our opinion, the frequency of
verification is reasonable.

ii. (a) The inventory (excluding stocks with third parties)
has been physically verified by the Management during the year. In
respect of inventory lying with third parties, these have substantially
been confirmed by them. In our opinion, the frequency of verification
is reasonable.

(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.

iii. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act. Therefore, the provisions of Clause
3(iii)(a) and (iii)(b) of the said Order are not applicable to the
Company.

iv. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.

v. The Company has not accepted any deposits from the public within the
meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed
there under to the extent notified.

vi. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
specified under sub-section (1) of Section 148 of the Act, and are of
the opinion that, prima facie, the prescribed accounts and records have
been made and maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete.

vii. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing undisputed statutory dues in respect
of service tax and income tax, though there has been a slight delay in
a few cases, and is regular in depositing undisputed statutory dues,
including provident fund, employees' state insurance, sales tax, wealth
tax, duty of customs, duty of excise, value added tax, and other
material statutory dues, as applicable, with the appropriate
authorities.

(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of wealth- tax
which have not been deposited on account of any dispute. The
particulars of dues of income tax, sales tax, service tax, duty of
customs, duty of excise and value added tax as at March 31, 2015 which
have not been deposited on account of a dispute, are as follows:

Name of Nature of Amount Period to which the
the statute dues (Rs. in Lakhs) amount relates

(c) The amount required to be transferred to Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act, 1956 and the rules
made thereunder.

viii. The Company has no accumulated losses as at the end of the
financial year and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.

ix. According to the records of the Company examined by us and the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders, as applicable, as at the balance sheet date.

x. In our opinion, and according to the information and explanations
given to us, the terms and conditions of the guarantee given by the
Company for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.

xi. In our opinion, and according to the information and explanations
given to us, the term loans have been applied, on an overall basis, for
the purposes for which they were obtained.

xii. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.

1. We have audited the accompanying financial statements of Graphite
India Limited (the "Company"), which comprise the Balance Sheet as at
March 31, 2014, and the Profit and Loss Statement and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information, which we have
signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company
in accordance with the Accounting Standards notified under the
Companies Act, 1956 (the "Act") read with the General Circular 15/2013
dated September 13, 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing and other applicable authoritative
pronouncements issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by Management, as well
as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion, and to the best of our information and according to
the explanations given to us, the accompanying financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;

(b) in the case of the Profit and Loss Statement, of the profit for the
year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.

Report on Other Legal and Regulatory Requirements

7. As required by ''the Companies (Auditor''s Report) Order, 2003'', as
amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'',
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Act (hereinafter referred to as the "Order"), and
on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.

8. As required by section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit;

(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;

(c) The Balance Sheet, Profit and Loss Statement, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;

(d) In our opinion, the Balance Sheet, Profit and Loss Statement, and
Cash Flow Statement dealt with by this Report comply with the
Accounting Standards notified under the Companies Act, 1956 read with
the General Circular 15/2013 dated September 13, 2013 of the Ministry
of Corporate Affairs in respect of Section 133 of the Companies Act,
2013;

(e) On the basis of written representations received from the directors
as on March 31, 2014 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act. i. (a) The Company is maintaining proper
records showing full particulars, including quantitative details and
situation, of fixed assets.

(b) The fixed assets of the Company have been physically verified by
the Management during the year and no material discrepancies have been
noticed on such verification. In our opinion, the frequency of
verification is reasonable.

(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.

ii. (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.

(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.

iii. (a) The Company has granted unsecured loan to a director of the
Company covered in the register maintained under Section 301 of the
Act. The maximum amount involved during the year and the year-end
balance of such loan is Rs. 6.00 Lakhs and Rs.Nil respectively. The
Company has not granted any other secured / unsecured loans to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions
of such loan were not prima facie prejudicial to the interest of the
Company.

(c) In respect of the aforesaid loan, the party has repaid the
principal amount, as stipulated, and was also regular in payment of
interest as applicable.

(d) In respect of the aforesaid loan, there is no overdue amount more
than Rupees One Lakh.

(e) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Therefore, the provisions of Clause
4(iii)(f) and (g) of the said Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.

v. (a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.

vii. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.

viii. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that, prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.

ix. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing the undisputed statutory dues in
respect of provident fund, service tax and customs duty though there
has been a slight delay in a few cases and is regular in depositing
undisputed statutory dues, including investor education and protection
fund, employees'' state insurance, sales tax, income

tax, wealth tax, excise duty and other material statutory dues, as
applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of wealth- tax
which have not been deposited on account of any dispute. The
particulars of dues of income tax, sales tax, service tax, customs duty
and excise duty as at March 31, 2014 which have not been deposited on
account of a dispute, are as follows:

2,187.90 2004-05 to
2011-12 Customs, Excise &
Service Tax
Appellate Tribunal
9.8 2010-11 and
2011-12 Appeal being filed
with Customs,
Excise & Service
Tax Appellate
Tribunal
104.77 2005-06 to
2007-08 Appeal being filed
with High Court
Income-
tax Act, Income Tax
and 4,582.89 2006-07 and Commissioner of
Income Tax

1961 Interest 2009-10 (Appeals)

x. The Company has no accumulated losses as at the end of the financial
year and it has not incurred any cash losses in the financial year
ended on that date or in the immediately preceding financial year.

xi. According to the records of the Company examined by us and the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders, as applicable, as at the balance sheet date.

xii. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of Clause 4(xii) of the Order are not
applicable to the Company.

xiii. As the provisions of any special statute applicable to chit fund
/ nidhi / mutual benefit fund / societies are not applicable to the
Company, the provisions of Clause 4(xiii) of the Order are not
applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Order are not applicable to the
Company.

xv. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of Clause 4(xv) of the Order are not
applicable to the Company.

xvi. In our opinion, and according to the information and explanations
given to us, the term loans have been applied, on an overall basis, for
the purposes for which they were obtained.

xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long- term
investment.

xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year. Accordingly, the provisions of Clause
4(xviii) of the Order are not applicable to the Company.

xix. The Company has not issued any debentures during the year and does
not have any debentures outstanding as at the beginning of the year and
at the year end. Accordingly, the provisions of Clause 4(xix) of the
Order are not applicable to the Company.

xx. The Company has not raised any money by public issues during the
year. Accordingly, the provisions of Clause 4(xx) of the Order are not
applicable to the Company.

xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.

For Price Waterhouse

Firm Registration Number: 301112E

Chartered Accountants

Pinaki Chowdhury

Kolkata Partner

May 9, 2014 Membership Number 57572

Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statements of Graphite
India Limited (the "Company"), which comprise the Balance Sheet as
at March 31, 2013, and the Profit and Loss Statement and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information, which we have
signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company
in accordance with the Accounting Standards referred to in sub-section
(3C) of section 211 of ''the Companies Act, 1956'' of India (the
"Act"). This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.

4. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by Management, as well as evaluating the overall
presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion, and to the best of our information and according to
the explanations given to us, the accompanying financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;

(b) in the case of the Profit and Loss Statement, of the profit for the
year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.

Report on Other Legal and Regulatory Requirements

7. As required by ''the Companies (Auditor''s Report) Order, 2003'', as
amended by ''the Companies (Auditor''s Report) (Amendment) Order,
2004'', issued by the Central Government of India in terms of sub-
section (4A) of section 227 of the Act (hereinafter referred to as the
"Order"), and on the basis of such checks of the books and records
of the Company as we considered appropriate and according to the
information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.

8. As required by section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit;

(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;

(c) The Balance Sheet, Profit and Loss Statement, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;

(d) In our opinion, the Balance Sheet, Profit and Loss Statement, and
Cash Flow Statement dealt with by this Report comply with the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Act;

(e) On the basis of written representations received from the directors
and taken on record by the Board of Directors, none of the directors is
disqualified as on March 31, 2013, from being appointed as a director
in terms of clause (g) of sub-section (1) of section 274 of the Act.

Annexure to Independent Auditors'' Report

Referred to in paragraph 7 of the Independent Auditors'' Report of even
date to the members of Graphite India Limited on the financial
statements as of and for the year ended March 31, 2013

i. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.

(b) The fixed assets of the Company have been physically verified by
the Management during the year and no material discrepancies have been
noticed on such verification. In our opinion, the frequency of
verification is reasonable.

(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.

ii. (a) The inventory excluding stocks with third parties has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.

(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.

iii. (a) The Company has granted unsecured loan to a director of the
Company covered in the register maintained under Section 301 of the
Act. The maximum amount involved during the year and the year-end
balance of such loan is Rs. 10.80 Lakhs and Rs. 6.00 Lakhs
respectively. The Company has not granted any other secured / unsecured
loans to companies, firms or other parties covered in the register
maintained Section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions
of such loan are not prima facie prejudicial to the interest of the
Company.

(c) In respect of the aforesaid loan, the party is repaying the
principal amount, as stipulated, and is also regular in payment of
interest, as applicable.

(d) In respect of the aforesaid loan, there is no overdue amount more
than Rupees One Lakh.

(e) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Therefore, the provisions of Clause
4(iii)(f) and (g) of the said Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.

v. (a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.

vii. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.

viii. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that, prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.

ix. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing the undisputed statutory dues in
respect of service tax, provident fund and employees'' state insurance
though there has been a slight delay in a few cases and is regular in
depositing undisputed statutory dues, including investor education and
protection fund, income tax, sales tax, wealth tax, customs duty,
excise duty and other material statutory dues, as applicable, with the
appropriate authorities.

(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of wealth- tax
which have not been deposited on account of any dispute. The
particulars of dues of income tax, sales tax, service tax, customs duty
and excise duty as at March 31, 2013 which have not been deposited on
account of a dispute, are as follows:

Name of Nature of Amount Period to which the Forum where the
the
statute dues (Rs. in
Lakhs) amount relates dispute is
pending

x. The Company has no accumulated losses as at the end of the
financial year and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.

xi. According to the records of the Company examined by us and the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders, as applicable, as at the balance sheet date.

xii. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of Clause 4(xii) of the Order are not
applicable to the Company.

xiii. As the provisions of any special statute applicable to chit
fund/ nidhi/ mutual benefit fund/ societies are not applicable to the
Company, the provisions of Clause 4(xiii) of the Order are not
applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Order are not applicable to the
Company.

xv. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of Clause 4(xv) of the Order are not
applicable to the Company.

xvi. In our opinion, and according to the information and explanations
given to us, the term loans have been applied, on an overall basis, for
the purposes for which they were obtained.

xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long- term
investment.

xviii. The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Act during the year. Accordingly, the provisions of
Clause 4(xviii) of the Order are not applicable to the Company.

xix. The Company has not issued any debentures during the year and does
not have any debentures outstanding as at the beginning of the year and
at the year end. Accordingly, the provisions of Clause 4(xix) of the
Order are not applicable to the Company.

xx. The Company has not raised any money by public issues during the
year. Accordingly, the provisions of Clause 4(xx) of the Order are not
applicable to the Company.

xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.

For Price Waterhouse

Firm Registration Number: 301112E

Chartered Accountants

Pinaki Chowdhury

Kolkata Partner

May 10, 2013 Membership Number 57572

Mar 31, 2012

1. We have audited the attached Balance Sheet of Graphite India
Limited (the "Company") as at 31st March, 2012, and the related Profit
and Loss Statement and Cash Flow Statement for the year ended on that
date annexed thereto, which we have signed under reference to this
report. These financial statements are the responsibility of the
Company's Management. Our responsibility is to express an opinion on
these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
(together the "Order") issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956'
of India (the 'Act') and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
the information and explanations given to us, we further report that:

i. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.

(b) The fixed assets of the Company have been physically verified by
the Management during the year and no material discrepancies between
the book records and the physical inventory have been noticed. In our
opinion, the frequency of verification is reasonable.

(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.

ii. (a) The inventory(excluding stocks with third parties) has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.

(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.

iii. (a) The Company has not granted any loans, secured or unsecured,
to companies, firms or other parties covered in the register maintained
under Section 301 of the Act other than unsecured loan of Rs. 12.00
lakhs to a director of the Company. The maximum amount involved during
the year and the year-end balance of such loan is Rs. 12.00 lakhs and
Rs. 10.80 lakhs respectively.

(b) In our opinion, the rate of interest and other terms and conditions
of such loan are not prima facie prejudicial to the interest of the
Company.

(c) In respect of the aforesaid loan, the party is repaying the
principal amount, as stipulated, and is also regular in payment of
interest, as applicable.

(d) In respect of the aforesaid loan, there is no overdue amount more
than Rupees One Lakh.

(e) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.

iv. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, no major weakness has been noticed or
reported.

v. (a) In our opinion, and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.

(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.

vii. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.

viii. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by
the Central Government of India, the maintenance of cost records has
been prescribed under clause (d) of sub-section (1) of Section 209 of
the Act, and are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.

ix. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is regular in depositing the undisputed statutory dues, including
investor education and protection fund, employees' state insurance,
sales tax, wealth tax, service tax, customs duty, excise duty and other
material statutory dues, as applicable with the appropriate authorities
and is generally regular in respect of provident fund and income tax.

(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
customs duty, sales tax, service tax and excise duty as at 31st March,
2012 which have not been deposited on account of a dispute (there being
no such cases with regard to income tax and wealth tax), are as
follows:

x. The Company has no accumulated losses as at 31st March, 2012, and it
has not incurred any cash losses in the financial year ended on that
date and in the immediately preceding financial year.

xi. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to bank as at the balance sheet date. The Company
does neither have any outstanding dues to any debenture holder or any
financial institution at the beginning of the year nor has it obtained
any loans from such parties during the year.

xii. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.

xiii. The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
Company.

xiv. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.

xv. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.

xvi. In our opinion, and according to the information and explanations
given to us, the term loans have been applied, on an overall basis, for
the purposes for which they were obtained.

xvii. On the basis of an overall examination of the balance sheet of
the Company, in our opinion, and according to the information and
explanations given to us, there are no funds raised on short- term
basis which have been used for long-term investment.

xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.

xix. The Company has not issued any debentures during the year; and
does not have any debentures outstanding as at the year end.

xx. The Company has not raised any money by public issues during the
year.

xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of any such case by the Management.

4. Further to our comments in paragraph 3 above, we report that:

i. We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of
our audit;

ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;

iii. The Balance Sheet, Profit and Loss Statement and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;

iv. In our opinion, the Balance Sheet, Profit and Loss Statement and
Cash Flow Statement dealt with by this report comply, in all material
respects, with the accounting standards referred to in sub- section
(3C) of Section 211 of the Act;

v. On the basis of written representations received from the directors
and taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2012 from being appointed as a director
in terms of clause (g) of sub-section (1) of Section 274 of the Act;

vi. In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, and give a true and fair
view in conformity with the accounting principles generally accepted in
India:

(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;

(b) in the case of the Profit and Loss Statement, of the profit for the
year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.

For PRICE WATERHOUSE

Firm Registration Number - 301112E

Chartered Accountants

(Pinaki Chowdhury)

Partner

Membership No. 57572

Kolkata

11th May, 2012

Mar 31, 2011

1. We have audited the attached Balance Sheet of Graphite India
Limited as at 31st March, 2011 and the related Profit and Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto, which we have signed under reference to this report. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as, evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 as
amended by the Companies (Auditors Report)(Amendment) Order, 2004
(together the Order), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of The Companies Act, 1956
of India (the Act) and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
the information and explanations given to us, we report that:

i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation, of fixed
assets.

(b) The fixed assets of the Company have been physically verified by
the management during the year and no material discrepancies between
the book records and the physical inventory have been noticed. In our
opinion the frequency of verification is reasonable.

(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.

ii) (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventory lying with third parties, these have been confirmed by them.
In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our
opinion, the Company has maintained proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.

iii) (a) The Company has not granted any loans, secured or unsecured,
to companies, firms or other parties covered in the register maintained
under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.

iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company and according to the information and
explanations given to us, we have neither come across nor have we been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.

v) (a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Act have been entered in the register

required to be maintained under the Section.

(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of rupees five lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any deposits from the public within
the meaning of Section 58A and 58AA of the Act and the rules framed
thereunder.

vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the
Company in respect of generation of power and manufacture of steel
where, pursuant to the Rules made by the Central Government of India,
the maintenance of cost records has been prescribed under Clause (d) of
sub-section (1) of Section 209 of the Act and are of the opinion that
prima facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the
records with a view to determine whether they are accurate or complete.

ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
has generally been regular in depositing during the year the undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the
records of the Company examined by us as at 31st March, 2011, there
were no dues of Wealth Tax, Income Tax and Cess which have not been
deposited on account of any dispute other than certain disputed Customs
Duty, Sales Tax, Service Tax and Excise Duty

dues, in respect of which amounts involved and forums at which dispute
is pending have been indicated in Note 10 on Schedule 31 to the
Accounts.

x) The Company has no accumulated losses as at 31st March, 2011, and it
has not incurred any cash losses in the financial year ended on that
date and in the immediately preceding financial year.

xi) According to the records of the Company examined by us and the
information and explanations given to us, the Company has not defaulted
in repayment of dues to bank or to debenture holders as at the Balance
Sheet date. The Company does neither have any outstanding dues to any
financial institution at the beginning of the year nor has it obtained
any loans from such institution during the year.

xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.

xiii) The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
Company.

xiv) In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.

xv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.

xvi) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained other than to the extent of
Rs. 2500 lakhs which is yet to be utilised.

xvii) On the basis of an overall examination of the Balance Sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term basis
which have been used for long-term investment.

xviii) The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.

xix) The Company has neither issued during the year any secured
debentures nor has any outstanding debentures at the year-end.

xx) The management has disclosed the end use of money raised by public
issue vide Note 11 on Schedule 31 to the Accounts which has been
verified by us.

xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.

4. Further to our comments in paragraph 3 above, we report that:

(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;

(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;

(iii) The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;

(iv) In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report comply with the
applicable accounting

standards referred to in sub-section (3C) of Section 211 of the Act;

(v) On the basis of written representations received from the directors
and taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2011 from being appointed as a director
in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the prescribed
manner the information required by the Act and give a true and fair
view in conformity with the accounting principles generally accepted in
India:

(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;

(b) In the case of the Profit and Loss Account, of the profit for the
year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.

1. We have audited the attached Balance Sheet of Graphite India
Limited as at 31st March, 2010 and the related Profit and Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto, which we have signed under reference to this report. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in die financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as, evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together the Order"), issued by the Central Government of India in
terms of sub- section (4A) of Section 227 of The Companies Act, 1956
of India (the Acf) and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
die information and explanations given to us, we report that:

i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.

(b) The fixed assets of the Company have been physically verified by
the management during the year and no material discrepancies between
the book records and the physical inventory have been noticed. In our
opinion the frequency of verification is reasonable.

(c) In our opinion and according to the information

and explanations given to us, a substantial part of fixed assets has
not been disposed of by the Company during the year.

ii) (a) The inventory (excluding stocks widi third parties) has been
physically verified by the management during the year. In respect of
inventory lying widi third parties, these have been confirmed by them.
In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to die size of die Company and the nature of its business.

(c) On die basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.

iii) (a) The Company has not granted any loans, secured or unsecured,
to companies, firms or otiier parties covered in the register
maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.

iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company and according to the information and
explanations given to us, we have neither come across nor have we been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.

v) (a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Act have been entered in the register required to
be maintained under the Section.

(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of rupees five lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.

vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A and 58AA or any other relevant provision of the Act and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal on the Company in respect of the aforesaid
deposits.

vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the
Company in respect of generation of power and manufacture of steel
where, pursuant to the Rules made by the Central Government of India,
the maintenance of cost records has been prescribed under Clause (d) of
sub-section (1) of Section 209 of the Act and are of the opinion that
prima facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the
records with a view to determine whether they are accurate or complete.

ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is regular in depositing the undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees
State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and other material statutory dues as
applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the
records of the Company

examined by us as at 31 st March, 2010, there were no dues of Wealth
Tax, Income Tax and Cess which have not been deposited on account of
any dispute other than certain disputed Customs Duty, Sales Tax,
Service Tax and Excise Duty dues, in respect of which amounts involved
and forums at which dispute is pending have been indicated in Note 10
on Schedule 31 to the Accounts.

x) The Company has no accumulated losses as at 31st March, 2010, and it
has not incurred any cash losses in the financial year ended on that
date and in the immediately preceding financial year.

xi) According to the records of the Company examined by us and die
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or to
debenture holders as at the Balance Sheet date.

xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.

xiii) The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
Company.

xiv) In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.

xv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.

xvi) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained other than a part of
unutilised proceeds of Convertible Bonds, issued in earlier year, lying
in bank accounts.

xvii) On the basis of an overall examination of the Balance Sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term basis
which have been used for long-term investment.

xviii) The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.

xix) The Company created security or charge in respect of debentures
issued in earlier year. However, no such debentures are outstanding at
the year end.

xx) The management has disclosed the end use of money raised by public
issue vide Note 11 on Schedule 31 to the Accounts which has been
verified by us.

xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with die generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.

4. Further to our comments in paragraph 3 above, we report that:

(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;

(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;

(Hi) The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;

(iv) In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report comply with the
applicable accounting

standards referred to in sub-section (3C) of Section 211 of the Act;

(v) On the basis of written representations received from the directors
and taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2010 from being appointed as a director
in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the prescribed
manner the information required by the Act and give a true and fair
view in conformity with the accounting principles generally accepted in
India:

(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;

(b) In the case of the Profit and Loss Account, of the profit for the
year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.